Selling with Data #73 - Personal versus enterprise productivity with AI

The ROI of AI is a hot topic that is being discussed in two different ways - individual productivity and enterprise productivity.

Personal productivity is measured at the individual level. It is typically the way a person’s time and effort is improved to complete regular tasks using AI tools. If a person unfamiliar with AI took an hour to prepare a weekly report, create an email, or review a document, then found that AI could cut that time in half, that is a 50% personal productivity gain.

Enterprise productivity is similar, though instead of measuring each individual the productivity gain is the total of all the individuals in the company. For example, if AI can reduce the time spent on enterprise processes like pricing approvals, CRM updates, or expense reports by half, that is a 50% enterprise productivity gain for the employees in the company.

These two might seem similar, but the differences are important.

Personal Productivity

People know if they make better food decisions, they will be healthier and happier – but temptations can hold them back. Even though there are thousands of helpful tools for people to make better decisions, most people tend not to use them consistently enough to change their behavior to capture the full value.

This is similar to AI for personal productivity. Tools like Copilot within Microsoft Office or ChatGPT are helpful, but only if people use them consistently. The amount of productivity benefits are based on how much the individual uses AI.

The way I complete my daily tasks is pretty much the same as how I did it five years ago, even though I have access to many of these AI-powered productivity tools. I still write my emails and create documents the way I did a few years ago. I use AI a few times per week mostly for search, ideas when starting to write something, or to summarize a long document. AI has not become part of my regular operations and so my personal productivity is slightly better, but not in a meaningful way.

This is true for many people. Reuters Institute and Oxford University surveyed 12,000 people in six countries. In the UK, only 2% of respondents report using AI tools on a daily basis. Another study says only 4 percent of young Americans (ages 14-22) say they use generative AI almost daily or every day, 11 percent say they use AI once or twice weekly, and only 12 percent say once or twice monthly. Many people have not figured out how to use AI to make a real impact on their personal productivity.

Enterprise Productivity

Enterprise productivity uses AI to change the way the company and its employees operate. Following the food analogy, instead of depending on each citizen to be healthier, a country creates a policy to improve the quality of the food supply chain or ban toxic ingredients so that all their citizens benefit. The impact of these changes is broader and has a higher ROI because the benefits are captured through consistent execution.

This is similar to empowering enterprise tools with AI. In the past it would have taken a seller more than 24 hours for pricing approvals, but with the help of AI many pricing approvals are generated in seconds. Five years ago, it took me at least 20 minutes to enter a promotion or vacation request, but now I can do it in under one minute using an AI virtual agent. The key is the productivity is not just for me, it is for everyone in the company (for IBM this is hundreds of thousands of people) and this results in a collective increase in productivity.

All Know the Way

One of my favorite quotes from Bodhidharma, a semi-legendary Buddhist monk and a popular reference in Wu Tang Clan songs, is: "All know the way, but few actually walk it." I love that quote. Everyone knows the right thing to do, but few people choose to live that life. This is very much the same with personal versus enterprise productivity.

Personal productivity is dependent too much on the individual changing the way they work. This limits the adoption and value capture. I predict we are going to see a challenging renewal cycle for personal AI productivity tools in the coming years as many companies question their return of investment.

On the other hand, companies that embed AI into their enterprise operations will compress the time that it takes to complete common tasks and capture the productivity gains across their entire organization. The gains will help employees while increasing the productivity of customers and partners. Enterprise productivity will be a meaningful ROI for many companies and provide competitive advantages that will not only grow revenue and profit but also open new revenue vectors and business models.

I am skeptical about the productivity gains of personal AI tools. The real opportunity is embedding AI into enterprise tools. The market will graduate from ChatGPT, to personal productivity tools like Copilot, to AI platforms for enterprise use cases.

Please leave a comment on the difference between personal and enterprise productivity.

Good selling.